YouTube’s music streaming service reportedly delayed further due to negotiations with indie labels

We’ve been hearing rumors of a YouTube streaming music service for what feels like forever, but according to a report out of the New York Times, the service has hit yet another snag. A report last month claimed that the service was delayed because YouTube and Google were approaching it with a “get it right” attitude and wanted to make the first version of the product as good as its competitors like Spotify and Rdio. This report, however, claims that YouTube has run into licensing troubles with independent music labels.

Members of the Worldwide Independent Network, which represents a variety of independent labels, posted a strongly worded letter this weekend that complains about the contracts YouTube has offered them for their streaming service. The labels claim that the contracts are “out of step with the marketplace for streaming,” and far less enticing than the deals that YouTube presented to the three major labels, Universal, Sony, and Warner.

YouTube and indie record labels have reportedly been going back and forth for months now, but have still failed to come to an agreement. Their recent decision to speak out, however, is allegedly because YouTube recently told them that if they don’t agree to the presented terms, then all of the music on the indies’ official YouTube channels would be blocked. In addition to that threat, YouTube also reportedly said that they would prevent them from collecting advertising revenue from user-uploaded videos that included their music.

“This is not a fair way to do business,” Alison Wenham, the chief executive of Worldwide Independent Network, said. “WIN questions any actions by any organization that would seek to injure and punish innocent labels and musicians — and their innocent fans — in order to pursue its ambitions.”

The letter was signed by representatives of independent trade groups from 18 countries, including the United States, Britain, Germany, Australia and Brazil. In response, a YouTube spokesperson said, “We have successful deals in place with hundreds of independent and major labels around the world; however, we don’t comment on ongoing negotiations.”

YouTube has been planning this music streaming service for over a year now. A recent report claimed that it would launch later this year, but it’s unclear if these indie negotiations will push the launch back further.